Seasonally adjusted retail spending was $27.01 billion for the month, down 0.4 per cent from $27.12 billion in November, according to Australian Bureau of Statistics data released on Tuesday.

Economists had forecast a 0.2 per cent December slump due to Australia's recent embrace of the popular discount sales seen in the US, which pushed November figures up by a revised 0.5 per cent.

The Aussie dollar took a dive on the news, falling from 72.14 US cents to 71.95 US cents by 1143 AEDT.

Spending on household goods dropped 2.8 per cent and clothing and footwear fell 2.4 per cent after both enjoyed strong rises during the Black Friday promotions.

The decline in December was seen in all states apart from WA, with ACT, Victoria and NSW leading the way.

BIS Oxford Economics analyst Sarah Hunter said the data confirmed the strength seen in consumer in the first half of 2018 had waned.

"Households are being forced to curb growth in spending as a result of weak income growth, and confidence appears to have taken a battering from heightened volatility in financial markets and falling house prices," she said.